Correlation Between Windtree Therapeutics and Palisade Bio

Can any of the company-specific risk be diversified away by investing in both Windtree Therapeutics and Palisade Bio at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Windtree Therapeutics and Palisade Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Windtree Therapeutics and Palisade Bio, you can compare the effects of market volatilities on Windtree Therapeutics and Palisade Bio and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Windtree Therapeutics with a short position of Palisade Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Windtree Therapeutics and Palisade Bio.

Diversification Opportunities for Windtree Therapeutics and Palisade Bio

0.9

Correlation Coefficient

Windtree Therapeutics  Palisade Bio

Almost no diversification

The 3 months correlation between Windtree and Palisade is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Windtree Therapeutics and Palisade Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palisade Bio and Windtree Therapeutics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Windtree Therapeutics are associated (or correlated) with Palisade Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palisade Bio has no effect on the direction of Windtree Therapeutics i.e., Windtree Therapeutics and Palisade Bio go up and down completely randomly.

Pair Corralation between Windtree Therapeutics and Palisade Bio

Given the investment horizon of 90 days Windtree Therapeutics is expected to under-perform the Palisade Bio. But the stock apears to be less risky and, when comparing its historical volatility, Windtree Therapeutics is 1.58 times less risky than Palisade Bio. The stock trades about -0.46 of its potential returns per unit of risk. The Palisade Bio is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  240.00  in Palisade Bio on December 1, 2024 and sell it today you would lose (157.00) from holding Palisade Bio or give up 65.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Windtree Therapeutics  vs.  Palisade Bio

Windtree Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Windtree Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Palisade Bio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Palisade Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Windtree Therapeutics and Palisade Bio

The main advantage of trading using opposite Windtree Therapeutics and Palisade Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Windtree Therapeutics position performs unexpectedly, Palisade Bio can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Palisade Bio will offset losses from the drop in Palisade Bio's long position.

The idea behind Windtree Therapeutics and Palisade Bio pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.